14.6k views
3 votes
A store sells a computer for $800. Customers can choose to receive a 25% discount and pay it offwith a loan at a simple interest rate of 9%, or they can choose to pay the full price and pay it offin 4 years with no interest. If the customer plans to pay it off in 4 years, which option is better?

1 Answer

1 vote

Determine the price of customer after discount.


\begin{gathered} 800-(25)/(100)\cdot800=800-200 \\ =600 \end{gathered}

Determine the interest paid by individual over 4 years.


\begin{gathered} I=(600\cdot4\cdot9)/(100) \\ =216 \end{gathered}

The amount paid by individual at the end of 4 years is,


\begin{gathered} A=600+216 \\ =816 \end{gathered}

So after the discount the individual had to pay $816 and with no discount had to pay onle $800 after 4 years.

So individual must choose to pay off the price in 4 years without any discount and no interest.

User Armaan Sandhu
by
7.2k points
Welcome to QAmmunity.org, where you can ask questions and receive answers from other members of our community.

9.4m questions

12.2m answers

Categories